Public Knowledge Letter on Fiber Migrations, Technology Transitions, GN Docket No. 13-5

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1 Maggie McCready Vice President Federal Regulatory Affairs Julie A. Veach Chief, Wireline Competition Bureau Federal Communications Commission th Street, SW Washington, DC I Street, NW, Suite 400 West Washington, DC Phone Fax maggie.m.mccready@verizon.com Re: Public Knowledge Letter on Fiber Migrations, Technology Transitions, GN Docket No Dear Ms. Veach: Public Knowledge and others claim that providers have acted inappropriately in migrating customers off of legacy copper facilities and onto more advanced fiber networks and ask the Commission to investigate providers migration practices. 1 These parties mischaracterize Verizon s practices regarding customers migration away from legacy copper facilities and ignore the significant benefits to consumers of more reliable and capable fiber networks. As a starting point, Verizon s focus is on providing high quality and reliable services to our customers over the best facilities we have available to serve them. Over the last decade, the overwhelming majority of our wireline customers in areas where we have deployed our all-fiber network have chosen to move to this more advanced network in order to obtain the more advanced services that it enables, including FiOS Internet, FiOS TV, and FiOS Digital Voice. Moreover, as discussed below, fiber facilities are more reliable than legacy copper, because they are immune to many of the environmental factors that affect copper cable and are less likely to experience outages during weather events, homeland security issues, or other public safety emergencies. As a result, about seven out of eight Verizon customers in our fiber areas are already served over fiber, and, when customers decisions to move to alternative services such as cable and wireless are factored in, less than six percent of households in our fiber area continue to receive service over copper facilities. Over the last couple of years, Verizon has also taken steps to bring the benefits of our fiber network to purchasers of plain old telephone service (POTS) over our legacy copper networks, with a particular emphasis on facilitating the migration of customers experiencing repeated service issues related to copper facilities to the more reliable fiber network. Almost 700,000 customers have moved to fiber facilities since the beginning of 2012, and are now receiving service over our fiber facilities. Now, in a small handful of communities where few customers remain on copper facilities, we have recently started the process of working with all 1 See Letter from Jodie Griffin, Public Knowledge, et al., to Julie A. Veach, Chief, Wireline Competition Bureau, FCC, Technology Transitions, GN Docket No. 13-5; et al. (May 12, 2014) ( the Letter ).

2 Page 2 remaining customers to complete the transition to fiber throughout these communities and to retire redundant, inefficient, and expensive copper facilities. Except where customers voluntarily decide to upgrade to other services, customers migrating to fiber continue to receive the same traditional POTS service, at the same price, and subject to the same terms and conditions, just over the more reliable fiber network. They receive the same features and functionalities available over copper, including voice mail and collect calling. Alarm services, medical monitoring devices, accessibility devices or services, and faxing continue to work with customers service. There is also no change to customers ability to call 911, and public safety answering points receive the same E911 information as before. To be clear: service received over fiber facilities is not the same thing as Verizon s FiOS suite of services. Fiber refers to a technology: a network made up of fiber optic cables. FiOS refers to one particular suite of services FiOS Digital Voice, FiOS TV, and FiOS Internet that Verizon provides on an optional basis to customers over fiber. But POTS customers migrated to fiber receive the same POTS service at the same price, unless they choose to upgrade to FiOS services. In all of these efforts, we ve worked with our customers, policymakers, and other stakeholders to explain what we are doing with regard to migrations and to address concerns that arise. We have also ensured that our practices with regard to migrations not only comply with existing rules but also advance the enduring values highlighted by the Commission, including caring for public safety and national security, universal access, competition, and consumer protection. Not only do Public Knowledge and their allies mischaracterize or ignore the measured and careful practices Verizon actually has applied in the case of fiber migrations, the letter also fundamentally ignores the many benefits to consumers from fiber. Fiber is a safe, proven, and known technology with a track record of serving communities well. There are many good reasons why providers like Verizon have invested billions in deploying fiber ever deeper into their networks over recent decades, and why the Commission and other policymakers have recognized that encouraging the migration to these next-generation networks is good for consumers and the economy. From the perspective of reliability, fiber is immune to many environmental factors that affect copper cable, including electronic and radio-frequency interference. It is less susceptible to weather conditions, meaning it is less likely to experience outages during weather events, homeland security issues, or other public safety emergencies. Fiber lines are generally more durable, do not corrode, have a much longer lifespan, and require fewer repairs than copper lines. The reliability advantages of fiber directly benefit customers. For example, as a result of Verizon s programs in recent years to encourage customers experiencing repeated service issues with copper facilities to migrate to fiber, there have been approximately one million fewer repair or trouble-shooting dispatches than would have been required had these customers remained on copper facilities. This equates to one million instances in which customers have not experienced an outage or other problem with their service. And for many of those customers, this also equates to time savings, since they would not have to schedule repair appointments and take time out to meet a repair technician. While the resulting consumer welfare gains may be difficult to quantify precisely, to put this in perspective, if one million customers were able to avoid a repair

3 Page 3 visit with a four hour window, a conservative estimate of the consumer welfare gains from those avoided repairs would approach $100 million. 2 Of course, there may be other ways to quantify the benefits as well, but regardless of the calculation the point is the same; the benefits to customers are significant and large. And the customer benefits from avoiding the outage or other service problem in the first place. Fiber also offers performance advantages, as it offers significantly greater bandwidth and is much less sensitive to distance limitations than is copper. Because the fiber optic signal is light rather than an electrical signal, there is very little signal loss during transmission, and data can move at higher speed and for greater distances. As a result, fiber can support much greater broadband and higher speed services than copper. Fiber facilities are also more energy efficient than copper because they use laser light not an electrical signal reducing energy consumption and resulting in a greener network. Based on these benefits, communities throughout the United States have been clamoring for the benefits of all-fiber networks. Customers seek the faster Internet access speeds, video content, and greater reliability available over fiber. In response, local governments including Chattanooga, Austin, and Kansas City have courted providers to bring fiber to their communities, or have expended tax-payer dollars to build wide-reaching fiber-based networks themselves, recognizing the economic development potential and the benefits to residents of these nextgeneration fiber networks. The President has praised fiber deployment and investment; the Commission has had as a long-standing goal the encouragement of more widespread fiber deployment. Indeed, a Commission working paper as far back as 1988 recognized that the advantages of fiber point to fiber s adoption as the primary transmission technology and will result in fiber replacing copper in residential networks for virtually all new construction such as new housing developments and planned communities. 3 This desire for the increased use of fiber and next-generation technology is nothing new. Providers across the country have deployed fiber cables in their networks and to homes for decades. For example, Verizon customers in two New Jersey communities and one Virginia community were served over fiber facilities beginning in the mid-1990s. Several years ago, in a series of central office migrations, all Verizon customers in Bartonville, Texas, and Verizon s consumer and mass business customers in Wesley Chapel, Florida, also made the shift to fiber. In many areas devastated by Hurricane Sandy, including tens of thousands of lines served out of two wire centers in Lower Manhattan, Verizon customers today are served exclusively over allfiber facilities that not only better meet their communications needs, but also will be better able 2 This values customers time based on the national average hourly wage of $ See Bureau of Labor Statistics, Table B-3: Average hourly and weekly earnings of all employees on private nonfarm payrolls by industry sector, seasonally adjusted, available at (last accessed ) (calculating average wage at $24.31). 3 See, e.g., FCC Office of Plans and Policy Working Paper No. 24, Through the Looking Glass: Integrated Broadband Networks, Regulatory Policy, and Institutional Change, 188 FCC LEXIS 2510, 10 (Nov. 23, 1988),

4 Page 4 to withstand any future storms and flooding. In short, today Verizon passes more than 18.9 million homes with its all-fiber network, and, soon, about 70% of our landline territory will have fiber. As noted above, our customers have strongly embraced it: we have about seven times as many customers on fiber facilities as those still on copper in the areas where we have deployed fiber. Similarly, other providers most notably including rural telephone companies have also made this shift in many areas. For example, Smithville Telecom advertises its use of traditional voice over a 100% facilities-based fiber optic network, and touts its consistent, reliable telephone service over fiber. 4 In an NTCA survey in 2012, 74% of the respondents had deployed fiber to the home in some capacity, and 10% were using only fiber facilities to provide voice and other services. 5 Many of these rural providers have used federal USF funding to support their fiber deployment. While ignoring the widely recognized benefits of fiber, the parties now requesting an investigation by the Commission recycle a variety of allegations that have already been presented and that Verizon has already refuted in other fora. For example, the letter cites to a recent The Utility Reform Network (TURN) motion brought before the California Public Utility Commission (CPUC) alleging that Verizon should not push customers from copper-based service to FiOS or Voice Link. 6 But, as explained above and as Verizon has already explained to the CPUC, Verizon uses its fiber network to provide both traditional telephone service and, if the customer chooses, advanced broadband services such as VoIP, Internet access, and video. 7 As Verizon has already established, it has offered its customers traditional basic telephone service and not just FiOS services or IP-based services over its next-generation fiber network for almost a decade. Indeed, in new housing developments in some areas, the only 4 See Smithville Telecom: Services, (last accessed ). 5 See NTCA 2012 Broadband/Internet Availability Survey Report (March 2013), veyreport.pdf. 6 Letter, at 2-3. While the parties requesting an investigation also trot out allegations concerning Verizon s Voice Link product, such allegations are of no relevance. With the narrow exception of a few dozen homes in a small portion of the New Jersey Barrier Islands where copper was destroyed by Hurricane Sandy an area subject to a pending discontinuance application Verizon has only offered Voice Link as an optional service for certain consumers experiencing trouble with copper-based services. Verizon has only done so where it has not deployed fiber facilities, and it has repaired copper for customers who decline the option of Voice Link. 7 Verizon California Inc. s (U 1002 C) Response to TURN s Emergency Motion, Order Instituting Rulemaking to Evaluate Telecommunications Corporations Service Quality Performance and Consider Modification to Service Quality Rules, R , at 2 (Apr. 15, 2014).

5 Page 5 network Verizon deploys is its advanced fiber network, and this network is used to provide both traditional telephone service and advanced broadband services. 8 Far from being improper, Verizon deployed this network with the explicit encouragement of the CPUC, which held that rather than repairing and maintaining older technology, It should be left to the providers to decide which technology should be used to offer telecommunications services in the future. [I]t would be unwise for a LEC to rely on upgrading existing networks with enhanced older technology in light of the pace of technological evolution. 9 Moreover, as Verizon has already explained, the informal complaints relied on by TURN and recycled again here do not support TURN s contention: only two of the complaints summarized involved customers allegedly being given incorrect information regarding VoIP service. In both cases, Verizon promptly remedied the complaint; 10 in neither instance is there evidence of any systemic or national issue. Thus, not only is there no basis supporting TURN s claims (and thus their allegations here), but the CPUC has already embraced the very deployment of fiber facilities that the letter disdains. In the same vein, Public Knowledge and their allies gloss over the resolution or existing review by state commissions of its other purported issues. For example, they point to a 2008 case in Maryland, alleging that Verizon routinely migrates customers from the copper network to unregulated services with inadequate procedures for customer notice and consent. 11 But as we explained to the Maryland regulators and again above, we have done no such thing. 12 Instead, where POTS customers served over copper have been migrated to fiber, they receive the same POTS service at the same price and subject to the same terms and conditions unless they choose to upgrade to some other service. This case was resolved years ago, and provides no basis for further investigation by the Commission. Public Knowledge also cites to a motion filed recently by the Office of People s Counsel in Washington, D.C. asking the Public Service Commission for expedited action and interim relief on fiber migration issues. But the PSC previously rejected a similar motion, explaining that the motion fails to provide anything to substantiate the claim that Verizon DC has terminated a customer s service without knowledge or consent. 13 While the Office of People s 8 Id. 9 Id. (quoting D , 1997 Cal. PUC LEXIS 520, *5556 (June 25, 1997)). 10 See id. at Letter at See, e.g., Verizon Maryland Inc. - Panel Direct Testimony of Paul Henkleman and Edward Googe, Inquiry into Verizon Maryland Inc. s Provision of Local Exchange Telephone Service Over Fiber Optic Facilities, Case No (June 19, 2008). 13 Investigation into the Continued Use of Verizon Washington, DC Inc.'s Copper Infrastructure to Provide Telecommunications Services, Public Service Commission of the District of Columbia Order No , 14, 15 (Dec. 9, 2013).

6 Page 6 Counsel has sought to amend its motion to preserve its claim, it has still not presented any further substantive evidence nor has it disputed that Verizon can and does provide traditional POTS service over fiber in the District to customers who opt for that service, no different from the traditional service provided over copper except that it rides on superior facilities. 14 Finally, Public Knowledge s letter regurgitates claims about the provisioning of voice service over wireless facilities on Fire Island and very small portions of New Jersey s Barrier Islands. But Verizon followed established Commission procedures in those areas, including filing an application under Section 214 for the interstate telecommunications services that would no longer be available. Additionally, the letter admits that, in response to public requests, Verizon has now installed fiber facilities on the storm-damaged portion of Fire Island. And with those facilities now deployed, the overwhelming majority of the orders placed to date include high-speed data service, not stand-alone voice. Finally, Public Knowledge and their allies inaccurately suggest that a regulatory process void exists. They are wrong; there are well-established processes. First, the Commission has long-established procedures for legacy copper retirement and network change notices. The Commission established those procedures in the Triennial Review Order 15 specifically to address replacement of copper loops or copper subloops with fiber-to-the-home loops or fiber-to-thecurb loops. 47 C.F.R (b)(2). This process provides for an extended period of notice to the public and to interconnecting carriers, and even allows an opportunity for objections which, if well founded, can permit limited delays (not to exceed six months from the provider s notice). 47 C.F.R (c). Other changes in networks, including the implementation of fiber within a network that does not include the use of fiber-to-the-home or fiber-to-the-curb, may be governed by standard network change procedures. 47 C.F.R In enacting these rules, the Commission specifically addressed and rejected proposals that would require affirmative regulatory approval prior to the retirement of any copper loop facilities, concluding that such proposals were not necessary and that the established network disclosure rules would best encourage all providers, including non-ilecs, to invest in broadband facilities. 16 There is no basis to seek to modify those existing rules now, and no evidence that they are not working exactly as intended. 14 See Verizon Washington, D.C. Inc. s Opposition to the Amended Motion of the Office of the People s Counsel Expedited Commission Action and Request for Interim Relief, Investigation into the Continued Use of Verizon Washington D.C. Inc. s Copper Infrastructure to Provide Telecommunications Service, Public Service Commission of the District of Columbia, Formal Case 1102 (April 23, 2014). 15 Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16,978 (2003) ( Triennial Review Order ). 16 See Triennial Review Order, 281.

7 Page 7 The Commission also has existing rules that come into play in those narrow circumstances where an interstate telecommunications service is impaired or discontinued. 47 C.F.R That section governs changes to a service that is offered, not changes to the underlying facilities or equipment. 17 Where a provider discontinues a legacy interstate telecommunications service, it files an application under this section for review. Under these facts, and with the multiple other state and federal rules and processes addressing these issues, the Commission should reject the request to create a redundant and unnecessary proceeding concerning the migration of customers away from legacy copper facilities. Very truly yours, cc: Stephanie Weiner Matthew DelNero Tim Stelzig U.S.C. 214(a) (noting that approval is not required for any changes in plant, operation, or equipment...which will not impair the adequacy or quality of service provided. )